With Metcash set to report its full year results in coming days, UBS anticipates the company will deliver total sales of $17.1bn, earnings of $451m, and net profit of $261m.
The broker notes food and supermarket sales of $9.4bn were up 0.6% year-on-year, while food inflation should benefit moving forward, while hardware sales of $3.0bn were up 15.8% year-on-year, and a continuing Total Tools rollout should offer further upside.
The Buy rating and target price of $5.00 are retained.
Sector: Food & Staples Retailing.
Target price is $5.00.Current Price is $4.13. Difference: $0.87 – (brackets indicate current price is over target). If MTS meets the UBS target it will return approximately 17% (excluding dividends, fees and charges – negative figures indicate an expected loss).